The Corporate Form of Business Organization

The primary reason why individuals are willing to pay entrepreneurs to organize production is A) that they have to guarantee that the entrepreneur will make a profit B) they avoid taxation when activities are organized by someone else C) that it is better for businesses to pay taxes than individuals D) that it reduces transaction costs E) that entrepreneurs are more vulnerable in the case of the owner

Which of the following is a disadvantage of the corporation compared to the sole proprietorship? A) limited liability B) difficulty raising start-up money C) lack of profitability D) corporate income is taxed twice E) corporations are more vulnerable in the case of the death of an owner